TREASURIES-Prices steady as US GDP data paints mixed picture

By Chris Reese NEW YORK, April 27 (Reuters) - U.S. Treasury debt priceswere mostly unchanged in choppy trade on Friday as consumerspending surged in the first quarter even as economic growthcame in below expectations, leaving investors reluctant torevise their risk profile. Limited strength in stocks tugged at Treasuries safe-havenappeal, and longer-dated debt was erring on the side of priceweakness. U.S. gross domestic product expanded at a 2.2 percent annualrate in the first quarter, the Commerce Department said onFriday in its initial estimate, moderating from the fourthquarter's 3 percent rate. Economists had forecast a 2.5 percentpace. However, consumer spending increased at a 2.9 percent rateduring the quarter, its fastest pace since the fourth quarter of2010. "Overall it was weaker than expected, but personalconsumption expenditures were a bit stronger than expected, sothat will probably give people something to feel good about inthe numbers," said Kathy Jones, fixed income strategist atCharles Schwab in New York. Benchmark 10-year notes were trading unchangedin price to yield 1.94 percent, while 30-year bondswere 2/32 lower in price to yield 3.13 percent. Safe-haven bids were supported by worries over Europe'ssovereign debt crisis, which has helped to keep benchmark yieldsbelow the psychologically important level of 2 percent for thepast three weeks. Standard & Poor's on Thursday cut Spain's credit rating bytwo notches, coming at a time when investors are alreadyconcerned about Spain's inability to grow out of its debt. Spainon Friday reported its unemployment rate hits 24 percent in thefirst quarter, the highest level in almost two decades.

"Treasuries continue to be a safe haven," Jones said. Barring any radical price action on Monday, benchmark noteswere on track for the biggest monthly dip in yield sinceSeptember of last year. Treasuries were unmoved on Friday by data showing U.S.consumer sentiment was little changed in April. The Thomson Reuters/University of Michigan's final readingon the overall index on consumer sentiment inched up to 76.4from 76.2 in March. The survey topped economists' forecasts for75.7, the preliminary figure reported in early April.